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Is an Aviva Capital Bond Plus treated as income if cashed in?
Weave
Posts: 178 Forumite
Hi
I am helping a widowed elderly friend with his finances. He has a 30 year old Aviva Capital Bond Plus Plan valued at £8k. He could do with cashing this in as he needs to access the funds but the paperwork I have read implies this would be treated as income and would affect state benefits. Can anyone confirm if I have understood this correctly?
The issue is he has a state and private pension of less than £200 per week but does not get pension guarantee credit at the moment which I think is wrong. In an ideal world he will cash in this bond to pay off debt and cover some other large bills that are coming up but I do not want it to show as earning £8k income this tax year or that will stop him getting the pension credit he really needs. He has very few other savings but does own his house.
Anyone know if I have got this right?
I am helping a widowed elderly friend with his finances. He has a 30 year old Aviva Capital Bond Plus Plan valued at £8k. He could do with cashing this in as he needs to access the funds but the paperwork I have read implies this would be treated as income and would affect state benefits. Can anyone confirm if I have understood this correctly?
The issue is he has a state and private pension of less than £200 per week but does not get pension guarantee credit at the moment which I think is wrong. In an ideal world he will cash in this bond to pay off debt and cover some other large bills that are coming up but I do not want it to show as earning £8k income this tax year or that will stop him getting the pension credit he really needs. He has very few other savings but does own his house.
Anyone know if I have got this right?
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Comments
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Currently, as held, it is not included in any means tested benefits. An 8k value surrendered wont impact directly on means tested benefits but it will increase the amount held as savings. The cumulative value of this with other savings could impact on means tested benefits if it is over threshold. If used to clear debt then it won't register for benefits as the life assurance wrapper and benefits allow for that.
I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.1 -
The issue is he has a state and private pension of less than £200 per week but does not get pension guarantee credit at the moment which I think is wrong.
Have a look at (very comprehensive) Age UK Guide.
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